How much Capital Gains Tax will you pay?

Reviewed for the 2026/27 UK tax year · sources: gov.uk & HMRC · how we research

Sell shares, funds or a second property for more than you paid, and the profit can be taxed. Here is how Capital Gains Tax works for 2026/27, after the £3,000 allowance and at the 18% and 24% rates, with a worked example.

What Capital Gains Tax is (and what's exempt)

Capital Gains Tax (CGT) is charged on the gain, the profit you make, not on the whole amount you sell for. If you buy shares for £10,000 and sell for £16,000, the gain is £6,000, and that is what CGT looks at.

Plenty is exempt, which trips people up:

• Your main home is usually exempt under Private Residence Relief.
• Anything inside an ISA or pension is completely free of CGT.
• Transfers between spouses or civil partners are tax-free.

CGT typically applies when you sell shares or funds held outside an ISA, a second home or buy-to-let, crypto, or a business.

The £3,000 tax-free allowance

Everyone gets an annual tax-free allowance (the annual exempt amount) of £3,000 for 2026/27. You only pay CGT on gains above that in the tax year. The allowance can't be carried forward, so if you don't use it, you lose it.

The rates for 2026/27: 18% and 24%

Once you're above the £3,000 allowance, the rate depends on your income:

• 18% on gains that fall within your unused basic-rate band.
• 24% on gains above it.

To find your rate, the taxable gain is stacked on top of your income. The part that still fits inside the £37,700 basic-rate band is taxed at 18%; anything above is 24%. So a basic-rate taxpayer can pay a mix of the two, while a higher-rate taxpayer pays 24% on the whole gain. For 2026/27 these rates are the same for shares, funds and residential property.

A worked example

Say you're a higher-rate taxpayer and you sell shares (held outside an ISA) for a £20,000 gain.

If you were a basic-rate taxpayer on, say, £35,000 of income, some of that £17,000 gain would sit inside your unused basic-rate band and be taxed at 18% instead. On those numbers the bill works out at about £3,164, because £15,270 is taxed at 18% and only £1,730 at 24%. The calculator below does this split for you automatically.

Selling a property? The 60-day rule

If you sell a residential property that isn't your main home and there's a taxable gain, you must report it and pay the tax to HMRC within 60 days of completion, not at the end of the tax year. Miss the deadline and HMRC can charge penalties and interest. Your main home is normally exempt, so this mostly affects second homes and buy-to-let.

Selling a business? Business Asset Disposal Relief

If you sell all or part of a qualifying business, Business Asset Disposal Relief can cut the rate to a flat 18% (for 2026/27) on up to £1 million of lifetime gains. The conditions are strict, so it's worth checking you qualify or asking an accountant.

Legitimate ways to reduce a CGT bill

• Use your £3,000 allowance every year. It resets each tax year and can't be carried forward, so spreading disposals across two tax years can use two allowances.
• Use both partners' allowances. Transfers between spouses or civil partners are tax-free, so a couple can use two £3,000 allowances and two sets of bands.
• Bed and ISA. Selling holdings and rebuying them inside a Stocks and Shares ISA shelters all future gains from CGT.
• Offset losses. Losses on other investments reduce your taxable gains, and unused losses can be carried forward.

Illustrative and educational only, not financial or tax advice. Figures are for the 2026/27 UK tax year and assume no capital losses, no other disposals and that your main home qualifies for Private Residence Relief. Reliefs and your exact income change the result. Always check gov.uk or speak to a qualified adviser.

Sources: gov.uk & HMRC (Capital Gains Tax rates, annual exempt amount and Business Asset Disposal Relief, 2026/27).